A Primary Benefit of 401(k)plans Is That Payments Made by Employees

question 60

True/False

A primary benefit of 401(k)plans is that payments made by employees into the plan are pretax, so the employee pays no tax on those dollars until after he or she retires or withdraws the money.

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Definitions:

Batches

Groups of items or goods processed or produced at the same time within a manufacturing operation.

Overhead Costs

Indirect expenses related to the day-to-day running of a business, such as rent, utilities, and administrative costs, which are not directly tied to production or sales.

Direct Materials

Raw materials that can be directly attributed to the production of goods or services and are an integral part of the finished product.

Fixed Costs

Regular expenses that an entity incurs, which are not affected by changes in business activity levels, such as lease payments and insurance premiums, essential for financial planning.